CAPITOL WIRELESS, INC., PETITIONER, VS.

THE PROVINCIAL TREASURER OF

BATANGAS, THE PROVINCIAL ASSESSOR OF BATANGAS, THE MUNICIPAL
TREASURER AND ASSESSOR OF NASUGBU, BATANGAS, RESPONDENTS.

Petitioner Capitol Wireless Inc. (Capwire) is a Philippine corporation in the business of providing international
telecommunications services.[3] As such provider, Capwire has signed agreements with other local and foreign
telecommunications companies covering an international network of submarine cable systems 

Petitioner Capwire claims that it is co-owner only of the so-called "Wet Segment" of the APCN, while the landing
stations or terminals and Segment E of APCN located in Nasugbu, Batangas are allegedly owned by the Philippine
[6]
Long Distance Telephone Corporation (PLDT).  Moreover, it alleges that the Wet Segment is laid in international,
[7]
and not Philippine, waters.

 Provincial Assessor had determined that the submarine cable systems described in Capwire's Sworn Statement of
True Value of Real Properties are taxable real property, a determination that was contested by Capwire in an
[12]
exchange of letters between the company and the public respondent.  The reason cited by Capwire is that the
cable system lies outside of Philippine territory, i.e., on international water

Petitioner Capwire asserts that recourse to the Local Board of Assessment Appeals, or payment of the tax under
protest, is inapplicable to the case at bar since there is no question of fact involved, or that the question involved is
not the reasonableness of the amount assessed but, rather, the authority and power of the assessor to impose the
[25]
tax and of the treasurer to collect it.  It contends that there is only a pure question of law since the issue is whether
[26]
its submarine cable system, which it claims lies in international waters, is taxable.  Capwire holds the position that
[27]
the cable system is not subject to tax.

Respondents assessors and treasurers of the Province of Batangas ana Municipality of Nasugbu, Batangas disagree
with Capwire and insist that the case presents questions of fact such as the extent and portion of the submarine cable
system that lies within the jurisdiction of the said local governments, as well as the nature of the so-called
[28]
indefeasible rights as property of Capwire.  Such questions are allegedly resolvable only before administrative
[29]
agencies like the Local Board of Assessment Appeals.

There is a question of law in a given case when the doubt or difference arises as to what the law is on a certain state
of facts; there is a question of fact when the doubt or difference arises as to the truth or the falsehood of alleged facts.

"whether or not an indefeasible right over a submarine cable system that lies in international waters can be subject to
[35]
real property tax in the Philippines,"  is not the genuine issue that the case presents - as it is already obvious and
fundamental that real property that lies outside of Philippine territorial jurisdiction cannot be subjected to its domestic
and sovereign power of real property taxation - but, rather, such factual issues as the extent and status of Capwire's
ownership of the system, the actual length of the cable/s that lie in Philippine territory, and the corresponding
assessment and taxes due on the same, because the public respondents imposed and collected the assailed real
property tax on the finding that at least a portion or some portions of the submarine cable system that Capwire owns
or co-owns lies inside Philippine territory. Capwire's disagreement with such findings of the administrative bodies
presents little to no legal question that only the courts may directly resolve.

It is not in dispute that the submarine cable system's Landing Station in Nasugbu, Batangas is owned by PLDT and
not by Capwire. Obviously, Capwire is not liable for the real property tax on this Landing Station. Nonetheless,
Capwire admits that it co-owns the submarine cable system that is subject of the tax assessed and being collected by
public respondents. As the Court takes judicial notice that Nasugbu is a coastal town and the surrounding sea falls
within what the United Nations Convention on the Law of the Sea (UNCLOS) would define as the country's territorial
sea (to the extent of 12 nautical miles outward from the nearest baseline, under Part II, Sections 1 and 2) over which
the country has sovereignty, including the seabed and subsoil, it follows that indeed a portion of the submarine cable
[42]
system lies within Philippine territory and thus falls within the jurisdiction of the said local taxing authorities.  It
easily belies Capwire's contention that the cable system is entirely in international waters. And even if such portion
does not lie in the 12-nautical-mile vicinity of the territorial sea but further inward, in Prof. Magallona v. Hon. Ermita,
 [43] [44]
et al.  this Court held that "whether referred to as Philippine 'internal waters' under Article I of the Constitution  or
[45]
as 'archipelagic waters' under UNCLOS Part III, Article 49(1, 2, 4),  the Philippines exercises sovereignty over the
body of water lying landward of (its) baselines, including the air space over it and the submarine areas underneath."
[46]
Further, under Part VI, Article 79  of the UNCLOS, the Philippines clearly has jurisdiction with respect to cables laid
in its territory that are utilized in support of other installations and structures under its jurisdiction.

he jurisdiction or authority over such part of the subject submarine cable system lying within Philippine jurisdiction
includes the authority to tax the same, for taxation is one of the three basic and necessary attributes of sovereignty,
[49]
 and such authority has been delegated by the national legislature to the local governments with respect to real
[5
property taxation.